What is investing?
Investing involves buying and selling financial assets over long periods of time, from one year to several decades. Successful investors implement a buy-and-hold strategy. This rule is suitable for long-term strategies, but experts recommend that modern investors audit their assets and periodically adjust their investment portfolio by closing positions in some assets and investing in new promising instruments.
There are two categories of investment: passive and active. A passive investor invests in long-term instruments, such as precious metals, shares of large companies or index funds. An active investor assembles a portfolio of higher-yielding assets, follows medium-term strategies, and allocates time to managing capital. You can invest on your own or outsource your funds to specialized companies.
Just like trading, investment activity involves risks – financial assets can lose value, and in times of market instability, investors’ deposits often “sink”. To mitigate risks, experts recommend including assets with varying degrees of risk and return in your portfolio. Protective instruments will help to preserve part of the capital in times of strong market volatility, while positions with high returns will become a driver of capital growth.